Cryptocurrencies have become staples of the global financial landscape. The best-known of these virtual currencies is probably bitcoin. It has attracted many investors, but the high volatility of its price also raises some concerns. Under these conditions, can bitcoin represent an interesting investment for 2023?
WHAT IS BITCOIN?
Bitcoin is a cryptocurrency founded in 2008 by a Japanese, Satoshi Nakamoto. This virtual currency is limited, initially, to 21 million units, the smallest being the 'satoshi', named after the creator of the currency.
What makes this cryptocurrency special is that all transactions in which it is involved are recorded in a kind of public ledger, called 'blockchain'. It is deemed unfalsifiable.
As we can read in the blurb of Bitcoin Era, a site specializing in cryptocurrency trading, the bitcoin-based system works without the intervention of any central authority. This is another of its originalities, and not the least.
It is therefore a decentralized currency, which quickly attracted many investors. Indeed, its capitalization exceeded $ 1,000 billion during the first quarter of 2021.
EXPERTS' OPTIMISTIC PREDICTIONS FOR 2023
The price of bitcoin, like that of all cryptocurrencies, is very changeable, it is difficult to pronounce its evolution. It is this volatility that explains the divergent opinions of experts on it.
Some are rather optimistic about the immediate future. They believe that after the period of decline experienced by bitcoin, for a year, its value could rise again in mid-2023.
For these analysts, the price of bitcoin moves in periods. After a downward cycle in early 2023, it is expected to rise again in the middle of the year.
Some analysts are even more optimistic. Indeed, they see bitcoin exceeding $ 80,000, or even $ 250,000. Which, to say the least, does not seem to reflect the current trend.
SOME EXPERTS ARE MORE
PESSIMISTIC ABOUT THE FUTURE OF CRYPTOCURRENCY IN 2023
The relative pessimism of these analysts is based primarily on the figures. Indeed, bitcoin had reached, in November 2021, the historic level of $ 68,789, a more than a 1,600% increase compared to March 2020.
However, since that date, the value of the cryptocurrency has continued to fall. Indeed, the price of bitcoin is only $ 16,700 as of November 24, 2022. Between November 2021 and November 2022, the value of this digital currency fell by nearly 75%.
These experts explain this evolution in particular from a rather gloomy economic context. Indeed, high inflation, partly linked to the war in Ukraine, and the increase in interest rates, due in particular to the policy of the US Federal Reserve (FED), make investors more cautious.
IS IT TOO LATE TO INVEST?
The current downward trend in the price of bitcoin could discourage potential buyers. Moreover, the behavior of this cryptocurrency is too familiar to them. So it no longer holds enough surprises.
Some investors also blame the operation of what specialists call 'mining', a complex process to secure bitcoin transactions.
But, for others, it's not yet too late to acquire bitcoins. They are based on some optimistic forecasts for 2023. Another element reassures them about the future of cryptocurrency: its adoption by financial institutions and investment funds.
But what reinforces the confidence of some maintains the pessimism of others. To them, in fact, this 'institutionalization' of bitcoin seems ominous, because it suggests lower returns.
WHERE TO BUY BITCOINS?
There are several possibilities to buy bitcoins. We can first go through platforms specialized in buying and selling bitcoins. So they work a bit like stock exchanges.
By using these platforms, the user, therefore, integrates a digital market. This 'bitcoin exchange' makes it possible to convert a currency, such as a dollar or a euro, into bitcoins. The reverse process is also possible.
Once on the platform, in fact, where he has created an account, the user must link it to a bank account, whose resources will allow him to buy bitcoins.
There are also bitcoin ATMs. They are often found in crowded places, such as airports or train stations. Simply swipe a sum of money into these ATMs to receive the equivalent in bitcoins.
Once these bitcoins are purchased, it is possible to store them in a 'wallet', in other words, a digital wallet.
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